Google isn't the only player in the hosted email game and another software giant looking to provide you with a hosted solution is none other than Microsoft. In this part of our series, I'll show you how to set up Microsoft's Office 365 service that provides a hosted email solution that proves an excellent alternative to Google Apps.

How Office 365 Works

Google isn't the only player in the hosted email game...

Unlike Google Apps, Office 365 hasn't been around for very long, only being officially launched in June 2011. For most, it provides a competing set of services to Google's offering, providing hosted email and calendar solutions as well as online storage and even an online office suite, known as Office Web Apps. All of these services require paid subscriptions based upon the number of users, per month, just like Google.

What sets Office 365 apart from Google Apps is the way some of these services work. With certain subscription plans, you not only receive access to the Office Web Apps but are also provided with a full copy of Microsoft Office for Windows or Mac for the duration of your subscription. For many freelancers and small businesses just starting out, this could save quite a lot of money since it would spread out the cost of the software along with the online services, instead of having to purchase Microsoft Office separately.

You may have already heard about this as both Microsoft and Adobe have shifted towards subscription-based software which, whilst generating polarising opinions, provides you with all updates and new versions so long as your subscription remains active.

Returning to the main focus of this article, Office 365 offers Microsoft Exchange based hosted email. Exchange is one of the most popular mail platforms around, offering features such as push email and widespread compatibility. In fact, Google used to use this service, offering a facility known as Google Sync . What this allowed was for Gmail users to add their account as an Exchange account on devices such as iPhone and Windows Mobile, instead of a standard IMAP or Gmail setup, allowing for true push email when configured.

Google has removed this functionality and reserved it only for subscribers to Google Apps for Business and Enterprise.

Office 365 Small Business costs from $5 per user per month on their lowest service plan. This price point requires it paid annually but you can pay monthly for $6 instead.

It's a little bit more than Google Apps, but at just $1 a month extra, it's really not much more. For the Premium subscription, you also receive a copy of Microsoft Office for Windows or Mac that you can run on up to 5 computers that you use.

Google Apps and Office 365 Compared

Overall, both services offer the same sort of functionality, but it's the way their functionality is implemented that sets them apart.

1. Push Email

As Office 365 uses Microsoft Exchange, it can provide true push email facilities to devices that support Windows Mobile. Google Apps for Business and Enterprise plans do offer this functionality by setting up Google Sync which requires reconfiguring your Google account on your mobile device as Microsoft Exchange.

However, Google Sync only works on mobile devices so you'll not be able to have push email on your desktop computer. With most apps providing the ability to check for emails every minute, then it's not a feature that would be entirely missed, but Office 365's Exchange platform still provides push.

2. Email Structure

Perhaps one of Gmail's most popular functions is it's incredible labels feature. Emails can be tagged with multiple labels and easily found, meaning that invoices could be tagged as both "to pay" and "invoices". With a more traditional email setup, we're limited to just folders for email organisation.

Office 365 doesn't offer any such label functionality, instead it relies upon a traditional folder structure for filing messages away.

Unfortunately, labels do have a downside. Unless you spend most of your time in the Gmail web app, on an Android device or within Google's official Gmail apps for iOS, managing labels can be a bit of a headache. So that Google can provide support for traditional email apps such as Apple Mail and Microsoft Outlook, it allows IMAP support. IMAP doesn't support labels and, instead, treats them as folders. This has the undesired effect of downloaded messages multiple times, meaning searching for messages can result in duplicate emails being shown.

Moreover, trying to file an email with labels within a standard email app can be tricky. There are Gmail-orientated apps out there such as Airmail which offers a more Gmail-orientated workflow whilst still providing you with all the benefits of a desktop mail app.

Office 365 doesn't offer any such label functionality, instead it relies upon a traditional folder structure for filing messages away. If you're someone who spends most of their time within a desktop mail app, and would prefer to avoid the hassle of Gmail's label implementation, then Office 365 might be the better choice.

I've used both services over the years and, for now at least, I've migrated to Office 365 simply because I prefer to use my default mail apps and never really use labels. However, I wouldn't recommend one over the other simply because it all depends on how you will use it.

Setting Up Office 365

In order to use Office 365, you'll need to have the following:

A domain name.

Access to your domain name settings (known as DNS records).

About 20 minutes of free time.

Similar to Google Apps, there is a free 1-month trial of Office 365 and the service I'll be configuring today is Office 365 For Small Business.

Step 1: Sign Up for Office 365

You can register for a free 1-month trial of Office 365 at the Office 365 Trial page. You'll need to scroll down to find the business options.

Select Try Now and then complete the following registration form.

In the second part of the form, you'll be asked to enter your desired user ID. Once you enter the first part (your username), the company name is autofilled into the box next to it.

So we can be up and running straight away, Microsoft provide all users with a companyname.onmicrosoft.com address which can be replaced by a domain name at any time.

Once you've signed up, you'll be automatically logged into your new Office 365 account, where you'll be prompted to enter a mobile number and confirm your backup email address in case you lose access to your account.

And with that, you're now registered for Microsoft Office 365! You can access your service at any time by visiting the Office 365 portal and signing in with your account.

Step 2: Configure for Email

Now that we have a fully working Office 365 service, it's time to configure it for email. Doing so will not only verify our domain name but also configure it to use for mail routing in one go, making it a little more straightforward than having to verify the domain name and then configure it for mail routing.

At the moment, we could simply use our companyname.onmicrosoft.com email address straight away, but since we're wanting a more professional email address anyway, let's just go ahead and set everything up now.

Within the Office 365 portal, select the first option called email address.

When you're ready, click on start now and enter your domain name that you wish to use with Office 365.

Select the options that best suit you with regards to existing email and website. I've selected that I've not been using email with this domain name before and that I don't have a website, even if you do. You'll find out why a little later on.

Once you've chosen your selected options, click next.

Completing the Steps

As you can see, Microsoft has provided me with multiple steps to complete:

Confirm I own my domain name.

Update existing Office 365 email addresses.

Add more users to my Office 365 service plan.

Complete the process.

We can perform all of these steps consecutively and can even start them straight away. Let's go through these step-by-step.

Step 1. Confirm My Domain Name

When you're ready, select start step 1.

You can select your domain registrar from the list or get the options manually. Similar to setting up Google Apps, selecting a registrar on the list provides step-by-step instructions to making the necessary changes.

Although my registrar, Godaddy, is on the list, for the purposes of this guide I'll be configuring the options manually. Select general instructions from the drop down menu and then click next.

Similar to Google Apps, verifying our domain name requires adding a DNS record. In a new tab or window, log in to your domain registrar and launch their DNS editor.

Microsoft provide two ways of verifying your domain name and either can be used. Unless you have a specific requirement, I would recommend just adding the TXT record.

We just need to add a new TXT record with the information Microsoft has provided us. Here's what it would look like when adding it to Godaddy.

It can take up to a few hours for the changes to take effect, depending on your domain registrar. I'd suggest waiting a few minutes after making and saving the changes, then attempting to verify.

Once Microsoft has verified your domain name, we can move on to the next step. Click finish.

Step 2. Update Existing Email Addresses

As the email address created when we registered used @companyname.onmicrosoft.com, Office 365 will update this to our newly verified domain name. Simply confirm you wish to do so and that's all there is to it.

Now that we've changed our email address, we'll need to log back in. Enter your new email address and existing password (the one we specified when setting up the Office 365 trial) and you'll be logged back in to the portal.

Don't worry that you might have to start the step-by-step guide again, we can carry on where we left off just by selecting the email address button again, which will have 2 of 4 steps completed (written underneath).

Step 3: Add Users

At this stage, you can add more users if you wish. Remember, you will be paying per user per month for additional users once the trial expires. I'll be skipping this step as it will just be me using the service, for now.

Step 4: Complete the Process

Now that we have verified our domain name and updated our email settings, the final task is to configure how our mail is routed.

Every domain name has something called an MX Record. These records are basically a domain name or IP address of a particular mail server. So when an email is sent to yourname@yourdomain.com, the mail server sending the email looks at the domain name yourdomain.com to see what the mail server details are. Once it has them, the message is then passed to it, where it's then placed in the user's inbox. Without these records, email just doesn't function.

Here's where we're going to deviate slightly from the step-by-step guide. If you remember earlier in the article when we began the step-by-step guide and were asked if we had a website, I said "no". That was actually a lie as I'd previously set up a website with with Squarespace in a previous article in this series, How to Set Up Your Online Business Presence With Squarespace.

Office 365 prefers, if possible, to manage your entire domain name and that means being in control of your domain's DNS settings. Rather than adjusting your domain name's MX records, Office 365 would prefer to manage your entire domain name and ask you change the name servers. What this means is that instead of going to your registrar to alter DNS settings, you'd do so within the Office 365 portal.

Whilst this is meant for ease of use, I'd recommend avoiding this approach. There's actually nothing wrong with having your DNS managed by Office 365 and, in some ways, it is more convenient. For me, I prefer to have my email, web hosting and DNS all managed separately. That way, if either my mail or web host go down then there's less chance of it having a knock-on effect on another service. Instead, we'll just do the same as we do with Google Apps and adjust the MX records manually.

Within the step-by-step guide, select save and close and, when you confirm this, you'll be back at the main portal screen. On the far right, select Manage your website and email domains.

Select your domain name from the list and then click where it says Verified.

It doesn't look like there's much information here but it's actually hidden from view. Click where it says DNS records created automatically by Office 365 to reveal the information we need.

If you completed our Google Apps article then you'll know there were a number of MX records to configure. With Office 365, there's actually just one, but there are two more DNS records that we need, a TXT record and another called a CNAME. This lets us add our email address into many Exchange mail apps and it will automatically configure the settings appropriately, something that proves very useful.

Make a note of both the MX and CNAME labelled autodiscover, as well as the TXT record that starts v=spf1.

Add these three DNS records to your registrar's control panel and your mail routing configuration is set up and ready to go.

Test Drive

Now we've finished all our hard work, it's time to actually test our mail settings and see if they're all working. Remember that DNS settings can take time to update so if you find something doesn't work straight away, give it a little more time and try again.

Launch your preferred mail app, in my case it's Apple Mail, and use the following settings to log in:

Account Type: Microsoft Exchange

Username: Your email address

Your Password: The password you have set

Server: Your domain name

As we added an option for email apps to "autodiscover" our mail server settings, any Microsoft Exchange-compatible email app should notice this and automatically discover the correct settings. Without any further information, we have successfully added a new email account that will allow us to send and receive mail.

Beyond Email

Office 365 provides far more than just email and, as we touched upon before, includes features such as contacts and calendar syncing, in addition to online storage with their SkyDrive service.

Wrapping Up

Microsoft's Office 365 provides a great alternative to Google Apps for those who would prefer to use an Exchange-based email service that offers similar features at a similar price. For users looking to purchase Microsoft Office at some point in the future who are also looking at hosted email, Microsoft Office 365 provides a very tempting option that could save you money.

Whether you are a Google fan or prefer Microsoft's long-established Exchange platform, you'll not be disappointed with whichever provider you decide to go with.

I'm a technology writer and web designer living in the UK. I write for a number of Apple-related sites, including Sparsebundle.
I also create web templates available at ThemeForest and offer bespoke web design services at my own site, jordanmerrick.com.
You can find me on both App.net and Twitter !